The biggest challenges facing retailers today
The retail industry is evolving rapidly, and with that evolution comes a host of challenges. While technological advancements and changing consumer expectations offer exciting opportunities, they also introduce new hurdles that retailers must overcome. At NRF 2025, we spoke with leading retailers and industry partners. It became clear that the retail landscape is transforming, and the future belongs to those who can successfully adapt.
1. Keeping up with retail technology
The challenge
New technology solutions are everywhere - AI, machine learning, automation and more. While these innovations promise efficiency and enhanced customer experiences, many retailers struggle with:
Choosing the "right" technology that delivers measurable results.
Integrating new retail tech into existing systems without disruptions.
Avoiding technology fatigue among employees and customers.
Vendors tend to make many promises - but how do you know which technology is the right fit for you? What will truly simplify operations, boost profitability, and create better experiences for both your team and your customers?
By choosing systems designed to play well with others and built to be future-proof, you can move quickly, flexibly, and find the perfect fit for your business. Innovate and iterate fast - that’s how you’ll stay ahead of the competition.
"Ultimately, the best retail tech serves as the backbone of an organization, but it’s up to the company to make it work. Tech is only ever going to be as good as the people who use it and the organization that supports it. Embracing retail tech fully means being ready to reshape internal processes, re-skill employees, and make structural adjustments that allow the organization to adapt in real time. That’s how the full potential of retail tech is realized." says Mobarak Said, former Head of IT & Digitalization at ILLUM.
Why it matters
Retailers need scalable and future-proof technology that seamlessly integrates into their existing workflows. Poor adoption or disjointed tech stacks can lead to inefficiencies, increased costs, and frustrated employees.
Best practice for retailers
Prioritize interoperable solutions that connect seamlessly with POS, e-commerce, and supply chain platforms.
Invest in user-friendly retail technology to improve adoption and minimize training time.
Ensure AI and automation enhance customer and employee experiences rather than replace human interactions.
How Sitoo helps
Sitoo’s cloud-native POS and Unified Commerce Platform eliminates the complexity of tech adoption by offering seamless real-time synchronization across locations and systems. With Sitoo, retailers can:
Future-proof their tech stack, ensuring smooth integration with emerging AI-driven tools.
Provide instant updates across all locations and channels.
Offer an intuitive, mobile-first POS that enhances, rather than complicates, store operations.
By removing barriers to technology adoption, Sitoo enables retailers to stay ahead of the competition and focus on customer experience rather than IT complexity.
2. Evolving your business model
The challenge
Retail is no longer just about selling products; it’s about creating experiences, services, and ecosystems that drive long-term customer engagement. To stay competitive, retailers must rethink their business models, but many struggle with:
Adopting platform-based ecosystems that connect different sales channels.
Balancing in-store and e-commerce operations efficiently.
Moving towards direct-to-consumer (DTC) models while maintaining strong retail partnerships.
The shift toward more agile business models is a big change we’re seeing right across the industry. Retailers are increasingly moving away from traditional business models to adopt platform-based ecosystems and direct-to-consumer (DTC) strategies. While these models provide greater flexibility and put the customer first, they also require big changes to the way you operate. Managing inventory, customer data, and sales across multiple platforms can become overwhelming.
However, by finding solutions that provide flexibility and are easy to integrate, you can easily scale and adjust your business model. A platform that connects both physical and digital touchpoints can help streamline these transitions, allowing for greater agility and alignment with new customer expectations.
"Retail success isn’t about chasing the latest trend or making sweeping aesthetic changes. It’s about understanding and optimizing the journeys of your customers, your staff, and your operations - and using tech to ensure all three work together to create a business that thrives", says Mark Thomson, Retail Industry Director EMEA at Zebra Technologies.
Why it matters
Traditional retail models are shifting towards subscription services, resale, live shopping, and immersive experiences. Retailers who fail to evolve risk being left behind.
Best practice for retailers
Build scalable retail ecosystems that support in-store, online, and emerging sales channels.
Leverage data and analytics to identify new revenue streams.
Invest in flexible, cloud-based infrastructure that supports growth and adaptability.
How Sitoo helps
Sitoo enables retailers to adapt their business models without disruption by providing a flexible, API-first Unified Commerce Platform that:
Supports multi-channel selling, making it easy to expand to DTC, marketplaces, and third-party platforms.
Offers real-time inventory tracking, ensuring stock is visible and sellable across all channels.
Seamlessly integrates with existing ERP, CRM, and e-commerce solutions, helping retailers stay agile.
With Sitoo, retailers can pivot their business models quickly while maintaining operational efficiency and exceptional customer experiences.
3. Keeping up with changing expectations
The challenge
Today's shoppers are dynamic, with preferences shifting faster than fashion trends. The rise of Gen Z, with its digital-first mindset, demands that retailers be agile and tech-savvy. Personalization isn't just a perk; it's a prerequisite. Retailers must harness data to tailor experiences while respecting privacy - a balancing act worthy of a tightrope walker. Many retailers struggle with:
Keeping inventory synchronized across channels.
Providing a seamless customer experience from browsing to checkout.
Handling flexible fulfillment models (BOPIS, ship-from-store, in-store returns for online orders).
Picture this: A customer browses your website, adds an item to their cart, then pops into your store expecting the same easy experience - only to find the product isn’t in stock, their loyalty points don’t register, and the associate has no clue about their online purchase history. Cue frustration.
The real challenge is making sure every customer interaction - whether online, in-store, or via a carrier pigeon (okay, maybe not that last one) - feels connected. If you don’t unify customer data, inventory, and interactions across all touchpoints, you risk losing loyalty and missing out on golden engagement opportunities.
Enter a unified commerce platform. It stitches everything together in real time, giving associates instant access to inventory, customer preferences, and past purchases - no matter where they happened. The result? A shopping experience that makes customers feel valued, drives loyalty, and keeps them coming back for more. Nothing says "we get you" like knowing exactly what they need when they need it.
"As much as technology excites me, it’s the human side of retail that inspires me the most. Retail is, at its core, about people. It’s about creating environments where customers feel welcomed, understood, and valued. It’s about empowering store associates to do what they do best: provide exceptional service with a personal touch. When technology and human engagement intersect seamlessly, it creates magic - shopping experiences that are not only efficient but also enjoyable and memorable." says Mark Thomson, Retail Industry Director EMEA at Zebra Technologies.
How Sitoo helps
Sitoo’s Unified Commerce Platform allows retailers to manage omnichannel complexity seamlessly with:
Real-time inventory synchronization, reducing stock discrepancies and fulfillment delays.
True unified commerce, enabling customers to shop, return, and exchange across all touchpoints.
Optimized order management, making BOPIS, click-and-collect, and same-day delivery more efficient.
With Sitoo’s omnichannel capabilities, retailers can eliminate operational silos and meet evolving customer expectations.
4. Managing talent & building culture
Retail moves fast - like, blink-and-you-miss-it fast. And if you don’t have a team that can keep up, innovate, and roll with the punches, you’re in trouble. But finding (and keeping) top talent while building a culture that sparks creativity and champions inclusivity? That’s easier said than done.
The key? Empower your store associates with the right tools. When your team has intuitive, easy-to-use systems that take the stress out of daily tasks, they can focus on what matters - creating amazing customer experiences. And happy, engaged employees don’t just stick around longer; they attract like-minded talent, drive innovation, and build a workplace culture that shines through everything they do. Because when your people win, your business does too.
"Remember that experience isn’t just about the customer; it starts with your employees. If your employees feel empowered and equipped, that translates directly into the customer experience. Create a culture and tech environment that supports them because they’re the ones who create the magic for your customers." says Mobarak Said, former Head of IT & Digitalization at ILLUM.
Final thoughts
The retail landscape is shifting rapidly. Retailers who embrace technology, rethink their business models, and prioritize seamless omnichannel execution will lead the way in 2025 and beyond.
The good news? The challenges aren’t roadblocks, they’re opportunities. With the right approach - finding the right technology, rethinking business models, and doubling down on customer experience - you can do more than just survive; you can lay the foundations to be successful now and long into the future.
The future of retail belongs to those who adapt, innovate, and put their customers first.
Want to learn more about how top retailers are solving these challenges? Get in touch with us for expert insights and solutions tailored to your business needs.
Last updated: February 3, 2025
